It's no myth--reading makes you a better writer.
There's an affliction a majority of would-be writers are suffering from today. No, it's not alcoholism, although a strong point could probably made in that case, too. The affliction writers today suffer from is “Idiot Syndrome.” They get this disease, to varying degrees, based on how much TV they watch on any given day. The more TV a writer watches, the more movies a writer sees, the more his/her writing suffers.
Because, you see, editors can see it in your writing. Cheesy TV dialogue, clichéd movie plot points, lazy descriptions, awkward scene shifts--all of these are symptoms of Idiot's Syndrome and it even the most novice of editors can diagnose the affliction before finishing the first chapter of your manuscript. It's almost always unintentional--a few lines of dialogue here, a few descriptions there. While you're looking for the perfect way to get rid of one of your characters, you hark back to the last good movie you saw and steal an idea or two.
“Just to give me a starting point,” you tell yourself. By chapter three, you're sneaking in entire lines of dialogue you liked. By chapter five, your two main characters are engrossed in a melodramatic fight so over-the-top that it could only have been found on ABC's newest melodrama.
How do you treat this disease? The answer is simple, albeit difficult: turn off your TV. Like the thousands of toxic materials we consume on a daily basis, TV needs to be enjoyed sparingly. There are a lot of good movies that come out every year, but for every good movie there are twenty bad ones. And let's face it: the bad ones are fun to watch. But they're dangerous to the easily influenced writer. Watch them sparingly, or, if you must watch them, disinfect your mind with 20cc's of Chekhov afterward to clean your creative palette.
Editors don't read manuscripts and look for ways to dumb down a book (good ones don't, at least). Editors are willing to let a book run its course, not limiting it to the literary equivalent of ninety minutes. When you read a book from a publisher, you're reading something that has passed through the hands of multiple editors, each working with the book's creator to make the book better, not necessarily more marketable (although again, this can occasionally happen). The more you read, the more you develop an understanding of the English language.
The more you read, the better you get.
It's that simple. And here's another thing you don't get from TV: you can get better no matter what you read. When you read a good book, you take in what makes it good. The more good books you read, the more you begin to notice what makes those books good, and the more you incorporate those things into your own writing. The more conscious you are of this, the more frequently it will happen. And the more bad books you read, the more you come to understand what makes them bad.